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Finding ways to stoke sales in a downturn

One powerful method of improving both revenue and margins is to raise the productivity of your sales force.

Von Satish Shankar and Dianne Ledingham

First published on Juni 10, 2009
Min. Lesezeit


When business conditions turn harsh, companies need every dollar of revenue they can find. But is there any way to rev up sales without giving away the store? One powerful method of improving both revenue and margins is to raise the productivity of your sales force. In good times, increasing the salesforce's effectiveness helps companies grow faster; in a downturn, a scientific approach that puts systems around the art of selling can be critical to keep revenue flowing without cutting margins. The first step is to develop a data-driven "heat map" of accounts and prospects. Every company has its best customers—the most profitable and, typically, the most loyal. Sales executives usually identify them by analysing win rates, revenue, relative market share and profitability among customer segments. But a downturn like this one demands an even sharper focus. Managers and sales reps need to know exactly which customers will continue buying. Which have strong cash positions, good access to credit, or both? Which companies or individuals should be your best customers? In a down market, many companies are re-evaluating their suppliers. That creates opportunities to steal share from a distracted competitor. All these high-potential customers are the hot spots in an otherwise cooling economy. Once you have a sense of who they are, you can draw a heat map of the market to guide sales efforts. Managers can screen out opportunities that don't fit the map and focus reps' efforts on those that do. With the longer sales cycles of a downturn, selling resources are stretched across more accounts, and managers have to make certain they are aimed at the right targets. A few months ago, for example, a broadcasting company refocused its advertising sales team on a few hot segments—health-care providers, which had been relatively unaffected by the downturn, and specialty retailers, which desperately needed advertising to counter reduced consumer spending. After just two months, sales in two test regions were up 90% and 450%. The heat map also helps to reassess territories and quotas. Do territories correspond appropriately to the map? Are quotas realistic in light of the new conditions? With longer sales cycles, managers also need to ensure that reps have realistic assessments of when they expect sales to close. The key here is careful forecasting, tracking with internal benchmarks, and discussion of major opportunities. Some companies create a "Deal War Room"—with the heat map on the wall—to ensure that consistent discipline is applied. Sales managers face two other challenges in a down market. One is to maximise the time reps spend in front of high-potential customers highlighted by the map. Consider channeling some of the reps' administrative functions to support staff or simplifying the systems. The other challenge is controlling costs, which may entail streamlining and rationalising the sales force. Most companies use a variety of sales channels. Detailed information about the behaviour and profitability of customer segments and microsegments from the heat map, as well as data about the productivity of existing selling efforts, allows sales executives to decide how best to deploy these different resources. To keep costs low, for instance, a company may decide to beef up its telesales operation and replace underperforming in-field reps. No downturn lasts forever. When the recession thaws, your sales organisation should be positioned to capitalise on pent-up demand. Companies that win during turbulence often recruit top sales talent from competitors. They may even pursue acquisitions and integrate the acquired companies' best sales reps with their own. A heat map helps show the way to that future. Satish Shankar is the leader of Bain & Company's Southeast Asia consumer products practice. Dianne Ledingham is a leader of the sales force effectiveness group in the customer strategy and marketing practice area. Adapted from the forthcoming book, 'Winning in Turbulence', by Bain & Company, published by Harvard Business Press. http://www.bain.com. Bain Book Winning in Turbulence Learn more about how companies can navigate through turbulent times and succeed as the economy improves.

When business conditions turn harsh, companies need every dollar of revenue they can find. But is there any way to rev up sales without giving away the store?

One powerful method of improving both revenue and margins is to raise the productivity of your sales force. In good times, increasing the salesforce's effectiveness helps companies grow faster; in a downturn, a scientific approach that puts systems around the art of selling can be critical to keep revenue flowing without cutting margins.

The first step is to develop a data-driven "heat map" of accounts and prospects. Every company has its best customers—the most profitable and, typically, the most loyal. Sales executives usually identify them by analysing win rates, revenue, relative market share and profitability among customer segments.

But a downturn like this one demands an even sharper focus. Managers and sales reps need to know exactly which customers will continue buying. Which have strong cash positions, good access to credit, or both? Which companies or individuals should be your best customers? In a down market, many companies are re-evaluating their suppliers. That creates opportunities to steal share from a distracted competitor.

All these high-potential customers are the hot spots in an otherwise cooling economy. Once you have a sense of who they are, you can draw a heat map of the market to guide sales efforts. Managers can screen out opportunities that don't fit the map and focus reps' efforts on those that do. With the longer sales cycles of a downturn, selling resources are stretched across more accounts, and managers have to make certain they are aimed at the right targets.

A few months ago, for example, a broadcasting company refocused its advertising sales team on a few hot segments—health-care providers, which had been relatively unaffected by the downturn, and specialty retailers, which desperately needed advertising to counter reduced consumer spending. After just two months, sales in two test regions were up 90% and 450%.

The heat map also helps to reassess territories and quotas. Do territories correspond appropriately to the map? Are quotas realistic in light of the new conditions?

With longer sales cycles, managers also need to ensure that reps have realistic assessments of when they expect sales to close. The key here is careful forecasting, tracking with internal benchmarks, and discussion of major opportunities. Some companies create a "Deal War Room"—with the heat map on the wall—to ensure that consistent discipline is applied.

Sales managers face two other challenges in a down market. One is to maximise the time reps spend in front of high-potential customers highlighted by the map. Consider channeling some of the reps' administrative functions to support staff or simplifying the systems.

The other challenge is controlling costs, which may entail streamlining and rationalising the sales force. Most companies use a variety of sales channels. Detailed information about the behaviour and profitability of customer segments and microsegments from the heat map, as well as data about the productivity of existing selling efforts, allows sales executives to decide how best to deploy these different resources. To keep costs low, for instance, a company may decide to beef up its telesales operation and replace underperforming in-field reps.

No downturn lasts forever. When the recession thaws, your sales organisation should be positioned to capitalise on pent-up demand. Companies that win during turbulence often recruit top sales talent from competitors. They may even pursue acquisitions and integrate the acquired companies' best sales reps with their own. A heat map helps show the way to that future.

Satish Shankar is the leader of Bain & Company's Southeast Asia consumer products practice. Dianne Ledingham is a leader of the sales force effectiveness group in the customer strategy and marketing practice area. Adapted from the forthcoming book, 'Winning in Turbulence', by Bain & Company, published by Harvard Business Press. http://www.bain.com.